If you wanted to compare the quantity of output of a country across time periods, which of the following would you use?
A) the consumer price index
B) nominal GDP
C) the GDP deflator
D) real GDP

Question

Quizplus · Accepted Answer

Real GDP would be the best choice as it adjusts for inflation and allows for accurate comparison of output across different time periods. The consumer price index measures changes in prices of goods and services over time, but does not specifically measure output. Nominal GDP measures output in current prices without adjusting for inflation, so it cannot be accurately compared across different time periods. The GDP deflator is similar to the consumer price index, but specifically measures changes in prices of goods and services that are included in GDP. While it can be used to adjust nominal GDP to real GDP, it is not as commonly used as other measures such as the Consumer Price Index.

If You Wanted to Compare the Quantity of Output of a Country